BEIJING (Reuters) – Prices of new homes in China rose faster in October, traditionally a peak season for house hunting, a private survey showed on Friday, suggesting recent support measures could have some early impact in a crisis-hit country. market.
The average price in 100 cities rose 0.29%, up from the previous month’s 0.14%, according to data released by real estate researcher China Index Academy.
On an annual basis, the average price rose by 2.08%, compared to growth of 1.85% in September.
The real estate market, once accounting for roughly a quarter of economic activity, has been in a prolonged downturn since 2021 and remains a major drag on the world’s second-largest economy.
Authorities introduced a series of easing real estate measures at the end of September, including a reduction in the minimum down payment ratio to 15% for all housing categories and easing restrictions on house purchases.
The stimulus measures appear to have boosted industry in some major cities. The research showed that megacity Shanghai recorded the largest monthly house price increase: 1.09%.
However, small towns continue to languish, underscoring the cautious buyer confidence that has cooled the real estate market in recent years.
Average prices for new homes fell 0.02% in smaller cities last month from a month earlier, data from the China Index Academy showed.
The value of new homes sold fell 34.7% year-on-year in January-October, although they rose 10.53% in October, according to a separate study published by the academy a day earlier.
“The increase in the top cities may simply be the result of pent-up demand in response to the relaxation measures. Such demand is unlikely to be sustainable, as evidenced by the cases of short-lived recoveries over the past two years,” the spokesperson said. economists at Nomura in a research note earlier this week.
“Ensuring the delivery of pre-sold homes is key to reversing the real estate crisis, especially in lower-tier cities. Direct financing from Beijing will be much more effective,” Nomura said.
(Reporting by Liangping Gao and Ryan Woo; Editing by Shri Navaratnam)
